As most Australian bicycle trade members, but perhaps not so many consumers realise, most of the famous European brands shifted the bulk of their production to Asia years ago.
But faced with ballooning delays and freight costs, plus tight ‘anti dumping’ tariffs, more recently there has been a growing trend to move at least some production back to Europe.
Bianchi is the latest to follow this trend. It has just announced a two phase €40 million (A$63 million) investment to quadruple their Italian production capacity.
Phase one will boost their assembly capacity from the current 250-300 bicycles per day to 1,000 to 1,500 per day. Phase two will be to build their own high end carbon frame manufacturing facility.
“Never before Europe has faced such a great opportunity to restore bicycle manufacturing and its necessary production technology,” said Bianchi CEO Fabrizio Scalzotto in the Italian business media platform Il Sole 24 Ore. According to this report, Bianchi has doubled its turnover in the past three years. To continue this growth, the company is more and more facing the difficulties of sourcing on a global level.
Scalzotto explained Bianchi’s motivation to start this investment scheme. “In the past, we were leading in aluminium frames envied by many other brands. Our production was well rooted in our country’s industrial infrastructure. The big change came with the introduction of carbon frames. The production of these frames never got a strong foothold in Italy. Together with bulk of the components, everything moved to the Far East.”
“This dependence on foreign suppliers is no longer sustainable. Together with the corona pandemic, this has resulted in lead times that vary between 500-700 days. On the other hand, the Chinese divested following the trade war with Washington and were forced to relocate to other Far East countries, which however do not guarantee the same quality and flexibility. The time is right to take production back in our own hands.”
The first part of Bianchi’s manufacturing strategy is the construction of a 10,000 square meter factory to increase its production. The company aims to step up its assembly capacity.
The initial investment of € 30 million (A$47 million) will include the implementation of robotics as one of the means to reach this production capacity. In the second phase, Bianchi will invest some € 10 million (A$16 million) in the production of carbon frames.
“We have already reached an agreement with the manufacturer to supply the necessary equipment. The carbon frame production will occupy some 6,000 square meters but it will take at least 24 month to have everything up and running. The project is very complex and it is very difficult to find skilled labor,” explained Mr Scalzotto.
Most of this article was first published in Bike Europe.